• Mon. May 20th, 2024

Acuiti Says That the UK’s Rules on Crypto Assets Should “Increase Economic Competitiveness”

Phillip Bryant

ByPhillip Bryant

Aug 6, 2023

The UK government should harness the potential of blockchain technology to explore novel approaches to regulating crypto assets, paving the way for future adoption in conventional markets, suggests Acuiti, a management intelligence platform.

In 2022, the Chancellor of the Exchequer expressed a vision to establish the UK as a prominent center for crypto asset technology. This aspiration was shared following the announcement of measures that acknowledged stablecoins as an accepted transaction medium.

As Prime Minister, Sunak played a role in the UK government’s release of a consultation paper outlining its approach to aligning the regulatory framework for crypto assets with pre-existing legislation.

In a recent Acuiti paper titled “Competitive Advantage: Charting the Path Ahead for UK Cryptoassets Regulation,” an endorsement is expressed for the approach above. The report also supports the industry-led initiatives outlined in the consultation paper.

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In collaboration with Portofino Technologies and Zodia Markets, leveraging the UK’s advantageous position as a second-mover could be instrumental in shaping regulatory frameworks after the EU enacts regulations. By engaging in such actions, a particular nation could establish an atmosphere that optimally nurtures ingenuity in cryptographic assets.

Surpassing the Requirements of the MICA

The development of the governance framework for crypto assets in the UK is currently underway following the enactment of the Markets in Crypto-Assets Regulation (MiCA) by the EU. In digital asset issuance and trading, MiCA stands as a comprehensive framework. However, it is worth noting that its composition predates the unfolding events of 2022.

This implies that the advantage lies with the UK, as it can consider the impact of FTX’s bankruptcy, a significant event that significantly transformed the crypto industry.

Specific segments of the crypto ecosystem have expressed reservations regarding MiCA, perceiving it as excessively stringent in particular domains, such as the prohibition of algorithmic stablecoins and the prerequisites for entities providing crypto asset custody services.

According to an individual named Will Mitting, who is the founder of a company called Acuity, the United Kingdom possesses a rather promising prospect of formulating a regulatory structure for crypto assets.

This particular framework has the potential to enhance economic competitiveness, stimulate the creation of employment opportunities, and foster innovation. Simultaneously, it aims to safeguard the interests of investors and ensure the establishment of secure and transparent markets.

To ensure optimal alignment, regulations about institutional investors should closely correspond with the pre-existing rules and guidelines. In various domains, crypto assets exhibit unique characteristics that set them apart. The regulatory framework for crypto investments in the United Kingdom necessitates a comprehensive alignment with these distinctions above, thereby facilitating the organic progression of the market in a manner that optimizes efficiency and ensures utmost security.

On the other hand, it is essential to acknowledge that the United Kingdom’s strategy carries inherent vulnerabilities and potential drawbacks. The governmental authorities have devised a meticulous approach to implementing novel regulations comprehensively, divided into two distinct phases.

The initial phase will primarily focus on establishing a robust regulatory framework for the secure storage and custody of a wide array of crypto assets. However, during the subsequent stage, aptly named Phase 2, regulatory measures about controlling most crypto assets will be introduced. This meticulous approach ensures that the evolving crypto landscape is effectively monitored and regulated, safeguarding the interests of all stakeholders involved.

The potential for delays in formulating a comprehensive regulatory framework for crucial aspects of the market may provide an opportunity for alternative jurisdictions that likewise strive to position themselves as prominent centers for advancing crypto asset innovation.

The paper on crypto asset regulation by Acuiti was derived from an insightful roundtable session conducted in May. This roundtable brought together numerous prominent entities operating within the UK crypto asset market alongside regulatory bodies.

Phillip Bryant

Phillip Bryant

Phillip Bryant, an esteemed writer in the financial field, imparts his extensive knowledge of currency markets to the readers of Main Crypto News. With a wealth of experience in international finance and a keen sense of market trends, Bryant offers timely and perceptive analysis of foreign exchange, keeping readers well-informed.

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